The Van Hollen Case and the FEC’s Power

One way of looking at a case like Van Hollen v. FEC is to evaluate its result. Did the decision promote anti-corruption goals, or impede them? Reform proponents have celebrated the result in Van Hollen, which vacated a 2007 rule that allowed corporations and unions to narrow their disclosure when sponsoring” electioneering communications”— issue ads that mention candidates on television or radio during the 30 or 60 days before an election. Some have noted that the decision will instead encourage these same groups to make independent expenditures instead and actually advocate the candidates’ election or defeat, under narrower disclosure requirements that still stand. Nonetheless, advocates for greater disclosure have celebrated the decision as a “victory for transparency,” as Commissioner Ellen Weintraub Tweeted last week.

Yet another way of looking at a case like Van Hollen is through the lens of agency power. Does the Federal Election Commission—charged with exclusive civil jurisdiction to interpret and enforce the campaign finance laws—have less room to act than before? When a court finds that the FEC’s decision-making process was irrational and based on a “clear error of judgment,” as the Van Hollen court found, then what does that say about how the FEC must approach its future decisions? For example, if the full FEC were to respond favorably to Commissioner Ann Ravel’s recent call for new rules “to address corruption and increase disclosure in the political process,” then might not a future litigant cite the Van Hollen case to argue that the agency overstepped its bounds when writing rules to require new disclosure?

One of the ironies of federal campaign finance law these days is that the biggest proponents of the FEC’s mission frequently seek to curb its power, while skeptics of campaign finance regulation favor creative uses of that same power.

On the reform side, this has largely resulted from McCain-Feingold. That law’s most vocal proponents saw the FEC’s rulemaking process as key to its effectiveness. When reform proponents did not obtain from the FEC the results they wanted on coordination, candidate appearances at party fundraising events, and state and local party spending, they went to court. Through the Shays litigation, they built a strong body of case law that struck down FEC action on general administrative law grounds. In the long term, the Shays cases may end up standing less for vigorous campaign finance regulation, and more for curbs on FEC decision-making—curbs which, in a different time and place, critics of regulation may try to interpose against agency rules or enforcement.

At the same time, the enforcement process has sometimes seen a high level of flexibility in interpreting statutes and rules toward deregulatory ends. To take just one example: the rule struck down in Van Hollen provided that a corporation need only disclose donors who gave “for the purpose of furthering electioneering communications.” In MUR 6002 involving Sheldon Adelson’s Freedom’s Watch, it was contended that even this narrowed requirement applied only when a donor gave to further a specific advertisement. Might not a future FEC, one more sympathetic to regulation, try to use this same flexibility on other questions of statutory interpretation—perhaps in ways favoring regulation, as the FEC did in several matters that arose from the 2004 Presidential election?

None of this is meant to engage the result in Van Hollen. One can certainly argue that the FEC might have avoided defeat by writing the rules more carefully in 2007 or by defending them less glibly on remand in 2012. Rather, it is to say that, when the FEC loses in court on administrative law grounds, the reasoning—and not just the result—can have long-term consequences for agency power.

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About This Blog

In the Arena: Law & Politics Update offers readers news and analysis on a wide range of topics related to the laws that regulate and affect political activity. Attorneys in Perkins Coie’s nationally recognized Political Law practice will provide insight and guidance on legal developments involving campaign finance, lobbying, the Federal Election Commission, and other topics of interest to those active in the political process. The blog’s current contributing authors include Brian Svoboda and Jonathan Berkon, as well as others in the Perkins Coie Political Law Group.

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About This Blog

In the Arena: Law & Politics Update offers readers news and analysis on a wide range of topics related to the laws that regulate and affect political activity. Attorneys in Perkins Coie’s nationally recognized Political Law practice will provide insight and guidance on legal developments involving campaign finance, lobbying, the Federal Election Commission, and other topics of interest to those active in the political process. The blog’s current contributing authors include Brian Svoboda and Jonathan Berkon, as well as others in the Perkins Coie Political Law Group.